Increasing Healthcare and Drug Costs Affect on the Socioeconomic Drag in the U.S.

Healthcare and Drug Costs

Increasing Healthcare and Drug Costs Affect on the Socioeconomic Drag in the U.S.

The United States spends about 2.5 trillion dollars a year just on health care (Johnson, 2009). However, the Unites States' prices keep going up which makes the economy go down. The rising health care costs, drug costs, and drug abuse affect the socioeconomic drag of the heath care economy in the United States of America.

Rising healthcare costs are a major issue for most Americans. So much of what is spent on healthcare does not help the economy. According to the research, "the health care system is dysfunctional and full of waste -- as much as 30% of all spending" (Johnson, 2009). Still, each year, Americans spend an average of 17.5% of the GDP on health care costs. That takes away from spending in other areas that would help strengthen the economy. Yet, a bulk of this spending is wasted and does not filter back into the economy when Americans need it the most. Essentially, "fixing it would free up money for other priorities, such as education and industrial innovation" (Johnson, 2009). With so many people unable to afford private coverage, the federal government is left to pick up the slack (Johnson, 2009). Huge increases in healthcare costs have ad such a negative impact, the people have prompted the federal government to step in and intervene. Here, the research suggests that "global trends in healthcare reform" have led to initiatives in the United States to "cover all citizens at lower standardized price points (Baumgartner, 2011). Demand for reform has lead to government funds being used to subsidize healthcare coverage, therefore increasing the number of poor Americans who have access to coverage. Yet, although healthcare premiums have gone down because of the Affordable Healthcare Act, they are still much higher than many Americans can afford, leaving many vulnerable to lack of access to appropriate care.

One of the biggest cost increases in healthcare has been drug related costs. In fact, spending on prescription drugs, and even non-prescription drugs, makes up a large part of spending on healthcare (Johnson, 2009). Ultimately, Americans are spending too much on drug costs, which limit their ability to save, invest, and spend such funds in other areas that would be more beneficial for the economy. Many Americans do not price shop for medications, which leads to "unnecessary spending" that drains their wallets (Johnson, 2009). This wasteful spending includes federal government spending in Medicare and Medicaid programs, which "that limits how much money the federal government and businesses have to invest in solving the energy problem, developing products that can be sold to other countries, creating technology that can bring medical breakthroughs, building infrastructure and more" (Johnson, 2009).